SUNW: Sun Microsystems Returns to Profitability: Reports Results for Second Quarter Fiscal Year 2007

Sun Microsystems, Inc. (NASDAQ: SUNW) reported results today for its fiscal second quarter, which ended December 31, 2006.


Revenues for the second quarter of fiscal 2007 were $3.566 billion, an increase of 7 percent as compared with $3.337 billion for the second quarter of fiscal 2006. The year-over-year revenue increase was due to sales of SPARC® chip multithreading (CMT) servers and x64-based servers as well as the increased acceptance of the SolarisTM 10 Operating System. Computer Systems products revenues increased 14 percent year-over-year, the fourth consecutive quarter of year-over-year revenue growth.

Net income for the second quarter of fiscal 2007 on a GAAP basis was $126 million or $0.03 per share on a diluted basis, as compared with a net loss of $223 million, or ($0.07) per share, for the second quarter of fiscal 2006.

GAAP net income for the second quarter of fiscal 2007 included: $58 million of stock-based compensation charges, $26 million of restructuring and related impairment of assets charges and a related tax benefit of $4 million. The net impact of these three items was approximately ($0.02) per share on a diluted basis.

Cash generated from operations for the second quarter of fiscal 2007 was $153 million, and cash and marketable debt securities balance at the end of the quarter was $4.837 billion.

"Sun's financial performance this quarter demonstrates that our strategy and discipline are paying off," said Jonathan Schwartz, CEO of Sun Microsystems. "The steady increase in adoption of our key developer platforms, the outstanding performance of our systems group, coupled with yesterday's endorsement of Solaris by Intel and today's landmark investment by KKR Private Equity Investors, L.P., are all validation of our momentum, and key drivers behind our push towards sustained growth and profitability."

Sun has scheduled a conference call today to discuss its financial results for Q2 fiscal year 2007 at 1:30 p.m. (PT), which is being broadcast live at www.sun.com/investors